How to Remove a Charge Off from Credit Reports

​A charge off is a negative account on your credit reports. There's a time limit as to how long a charge off can remain. You can use the FCRA to dispute a charge off with the credit reporting agencies and the creditor.

How to Remove a Charge Off from Your Credit Reports

What does charge off mean? It's a negative credit rating with a credit bureau and if you've skipped paying a debt chances are its sitting on your credit reports as a "charge off". When a creditor suffers a loss from non payment the debt is charged off to a profit and loss. This procedure basically clears the debt from their record keeping but it does not release your liability. A charge off is a negative rating and a credit rating killer.

credit report investigation

Not only will your credit reports be affected by a charge off but you will be pursued by the creditor and most likely a third party debt collector. This can result in a judgment which will also be placed in your credit history with the credit bureaus and is very difficult to remove.

It's best to avoid a judgment at all costs because they can remain in your credit history for a very long time and since they can be renewed, you could be a target for wage garnishments and collection activity for a long time.

How long can it remain on my credit reports?

The old FCRA (before revision) was very ambiguous, which means, even though it was not specific for saying exactly when a date commenced, it was often thought that making a payment could renew the statute of limitations and the seven year clock would start all over again for your debt.

Consumers worry about this because it was a catch 22 in their mind. If I pay a portion of it, they can come after me again and it will stay on my credit for another 7 years, so why bother? That was the general consensus and trying to get a straight answer out of a debt collector or the credit bureaus was even more frustrating.

By understanding the credit and collection laws you can determine how much longer you need to wait for the item to be removed from your credit reports. You don't have to be in credit purgatory forever.

So just how long can an item legally remain on your credit reports and how do you remove it sooner? That also depends on your awareness of the dates on the debt and exactly how old it is. The laws for how long it can remain on your credit can be either state or federal.

If your state offers more protection- then it will supersede the federal rule. For example, perhaps in NY a debt can remain for 5 years but under the federal (FCRA) it's seven. Your state would apply. It's called the Supremacy Clause.

Do I contact a credit bureau or creditor about my charge off?

Credit reports often contain mistakes or old information like an expired charge off, its inevitable with the amount of data the credit bureaus house. It's not uncommon for someone to see old expired debts still showing up in their credit reports; but often it's not so much a credit bureau mistake as it is the source that reported it.

The bureaus receive your account information from your creditors, so if the mistake is from them it will carry over. You can either contact the creditor to update their records or go directly to the credit bureaus and open an investigation to advise them of the mistake. The bureaus will contact the creditor on your behalf and ask for an update.

Before contacting the credit bureau its a good idea to contact your creditor first and advise them of the mistake. This will save time when the bureau reaches out to them for the correction. If not, the creditor may provide the same false information a second time and you'll have to start all over. Most issues on credit reports are a mistake from the source's end.

Collection Agency Issues with Reporting

Dont overlook the fact that a collection agency may have a hand in the false information being reported to your credit reports. When they purchased the debt they may have updated the account's dates as the date they purchased it. This is not legal. An original charge off date cannot be changed to accommodate a collection agency to use as a collection tool. The FCRA protects you from this.

There are two statute's to be considered for a charge-off

One to report and one to collect. In regards to collecting, if the debt does not meet the rule, then a lawsuit is still legally enforceable. If it does, that is your defense to stop any lawsuits from the collector or creditor.

A bill collector isn't going to volunteer this information to you, and in fact, they hope you dont discover it yourself. There is no law against them collecting on an expired debt so why would they tell you?

Once you receive the initial collection notice from a debt collector you'll have about 30 days to respond to whether to dispute it or not. If you dont, then legally the collector has the right to assume the debt is valid. If you do question the legitimacy of the debt then be sure to immediately respond to the collection notice in writing to protect your rights.

Tell the collector what it is that you dispute about the debt - whether it's the balance, date last paid etc., or if the debt has expired. Attach any proof to the letter you have - especially proof of an incorrect date that proves your statute of limitation claim. Once the collector is notified of an expired debt in writing, then activity must cease.

If the statute of limitations for the credit report hasn't expired yet, that will not change, however, you do have a right to open an investigation to the credit bureaus of its accuracy. If the bureau is unable to confirm it then the item must be removed. If the item is verified as accurate then it will remain until the expiration of the SOL even if its no longer collectible.

Charge off debt negotiation letters

If you're trying to clean up your credit reports then you may find the DIY credit repair kit fits exactly what you need. We've got sample credit and collection letters for almost any credit problem. From charge offs to negotiating with collection agencies, these letters are pre-written and come with our credit repair success strategies ebook, ask the expert and legal research tools. Everything you need in one location to fix your credit legally and save money too.